Underpaid rents

13 Replies

I have a five bedroom property rented to college student in New Jersey. The lease has all five tenants names on it. One tenant moved out without notice and the remaining tenants don’t want to pay the whole rent, just 4/5 ths as they feel I should be going after the 5th tenant for the balance. My options are to enforce the lease and evict, sue and try to recover the money owed me or renegotiate and bite the bullet until next May taking a $3000 loss. Any advice from New Jersey landlords would be greatly appreciated.

the landlords in my area make the tenants parents be on the lease as well just for this reason 

i hope you can recover your lose

welcome to the best learning site around @Roy Sloan  

read,read and read some more 

I would probably propose a compromise - increase the rent for the remaining 4 by 2/3 of the amount - it looks like that works out to about $100/tenant.  In exchange for the break on the rent, I would want them to replace the security deposit of the moved out tenant.

Here is the risk of insisting they pay the full amount - they just take anyone on as a 5th tenant.  That person could either be a terrible tenant or maybe even worse, doesn't get along with the others and causes a couple of them to leave.

If you have the parents on the lease, I would start with the tenant who moved out.  They may be willing to pay a fraction of the lease in exchange for being removed from the obligation.  If you get them to fork over a month and give up the security deposit, your reduce your loss to $1800, assuming you can't bump up the rent on the other tenants.

I do have each parent complete a co-signor agreement.  But, so far I am hearing compromise and negotiate which is my tendency.  I can bare the loss and chalk it up to a lesson learned, but I also have to be willing to enforce my lease.  The dilemma I am facing is that when faced with eviction, I may not even get a partial payment and it could take a while to recover an even larger loss.  The tenant who moved out turned out to have ruined her credit over the last 18 months and her parent is not much better.  

Is the property rented for 4 more months or 16 more months?

If there are 16 months remaining on the lease, there really is no reason they should not be able to find a suitable 5th tenant for the Fall, so any reduction should only be temporary.

lease expires May 31, 2015

@Roy Sloan  welcome to the site.

tough call.

1. You can enforce. Threaten eviction & deny any payment that is not in full.

This could lead them to knowing you're not messing around they will pay in full to avoid a hit to the students and the parents credit.

But

This could also cause all of them to leave

or worse

They could stay, not pay & force eviction.

Its one of those things were you need to decide up front. If you do not get the desired result yoh want from playing hardball are you willing to take it all the way to eviction?

James Wise, Real Estate Agent in OH (#2015001161)
216-661-6633

Your lease should say Joint and Several or something else along those lines which means that all tenants are responsible as one entity.  All five of the tenants should be responsible for paying the rent in full.  With parents as co-signers then you have ~10-15 people  who are responsible for paying the whole rent amount.  Why in the world would you compromise?

Have you contacted the parents of the student who left and told them they are responsible?

Also put some pressure on the students to get the additional roommate, chances are since they have to live with the person they have a vested interest in who it is and if they have to pay they will at least look for someone.    Make them understand it is their issue. In the end that entire amount is going to come out of their deposit if they don't get someone in there as long as you have them jointly responsible. They are now splitting utilities with one less person etc so they should be motivated to find the 5th.   However, I would grudgingly compromise before I started an eviction. They are not even going to try if you agree up front.

I caution that you don't threaten with it will come out of their deposit now or knowing students they will not take care of the place.  When we have had 2 instead of 3 we have locked the unrented room but that has always been upfront in the lease. They may not find January but  they may get a February to May person so maybe you can work with that?

Have you met with them?

Start with the tenant that left, but it sounds like there will not be any money there.

My starting position would be full payment until April, then May 4/5 payment.  You aren't really out any money since you can use the security deposit from the 5th renter for May.  You do have a smaller security deposit, so I would insist on that being replaced as part of any break that they get on rent if the vacancy is unfilled.

I work for a PM Company. We don't usually like college roommate situations because they end poorly as often as they end well. In most situations, the students can't meet our tenant screening requirements without the parents co-signing. We have also been known to ask for a larger security deposit if there are risk factors uncovered in the screening process (lack of income, poor job history, no established credit, etc.)  During our lease signing, all tenants on a lease are informed that they are all equally responsible to ensure that the entire rent is paid and that they are responsible for any damages to the home in full. It is a joint account... they are all responsible equally. They can remove a roommate from the lease if the remaining tenants can qualify without that roommate, but we have never offered or considered a rent reduction in this case. We have allowed people to add roommates as well (they still have to pass tenant screening.)

Consider a different perspective. If you rented to a married couple who divorced and one of them moved out, would they both still be equally responsible to fulfill the contract? Yes. If necessary, you would move forward with eviction to get the home back in to a performing state. Either they are capable of meeting the terms of the contract or they aren't. It is a business decision... when you don't waiver with your position and explain your options as being a business decision, many people find resources to meet their obligations... especially with co-signors involved. Personally, I would call the co-signers and explain your situation to them. Let them know that their credit would take a hit and a court judgement for damages and outstanding balances would also be added to their credit report.

The next option that we could offer would be a lease termination. In our state, we are allowed to charge a tenant the full term of the lease or until the unit is reoccupied. They must also pay to keep the utilities on during that time. Our office will generally offer a lease termination for 2 months rent (ample time to recondition, market, and lease the property.) As per our lease agreement, they forfeit the security deposit if they don't complete the term of the lease. This is usually a smoother transition than an eviction if someone is capable of paying for a couple months rent.

Understand, we do try to work with tenants, but as soon as your start making concessions, they keep coming back for even bigger breaks. Lines need to drawn. You can work with them regarding their options, but not where those lines are drawn.

Hopes this helps.

Originally posted by @Jesse T. :

I would probably propose a compromise - increase the rent for the remaining 4 by 2/3 of the amount - it looks like that works out to about $100/tenant.  In exchange for the break on the rent, I would want them to replace the security deposit of the moved out tenant.

Here is the risk of insisting they pay the full amount - they just take anyone on as a 5th tenant.  That person could either be a terrible tenant or maybe even worse, doesn't get along with the others and causes a couple of them to leave.

But, that doesn't preclude the tenants from taking another 5th tenant even if the OP doesn't insist on the full rent amount.

If I was a college student, that's what I'd do- find another 5th tenant and save some money.

Thank you everyone for the great advice.  Going to seek legal council and then make a decision.

why waste money on a lawyer?  Email everyone includng all parents and say unless you get rent in full then you'll be forced  to begin eviction proceedings.  

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